Today’s Menu I. Marx – Review capitalist responses to decline – Was Marx right? (cont.) – Why is inequality rising in the U.S. • Robert Reich’s analysis • A Marxist Analysis and perspective – Summary of Marx II The political economy of community, freedom, and equality – What do we deserve? What is “justice” in the allocation of resources? – The Market System – Equality of opportunity – The principle of redistribution III. Community rises again: The Political Economy of Nationalism
Review: Capitalist Response to decline: use the following tactics – Scour the earth for cheap labor – Find new markets • "The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere." – Persuade people to buy what they don’t really need – Find the cheapest materials – Use ideological weapons of the superstructure “don’t bite the hand that exploits you!” – Find an illusion of security through the concentration of wealth—creating giant corporations that are “too big to fail”
Was Marx right? (cont.) The last two decades were great...if you were a CEO or owner. Not if you were anyone else.
D. Wealth has become more concentrated….
E. Real average earnings have not increased in 50 years
Decline in real wages
corporate consolidation---the rise of the huge corporation
F. Why is inequality rising in the United States? – Marx saw globalization as one way that capitalists saved themselves from decline and pushed down wages • Freedom of goods, people, and money to move beyond national borders leads to……. – Outsourcing production to low-wage regions and… – Importing goods from low wage regions, which… – Reduces demand for American labor, which in turn….. » Weakens trade unions – The weaker the wage earners, the more power for those at the top to increase their own incomes
1. A global Labor Market focuses on classes not nations • Not “Wealth of Nations” but wealth of Class • Corporations locate production centers where wages are low • So American workers have to settle for lower wages • Growth of the large corporation (concentration of capital in a few companies) • Higher incomes for corporate executives
2. Three Categories of work (Reich)…… • work that delivers high level management services for capitalists The Symbolic Analyst • work that delivers routine production services Routine Production Workers • work that delivers routine personal services. Routine Personal Service Workers
a. The Symbolic Analyst
High level symbolic analysts account for 10 per cent of U.S. jobs • Services are in global demand • So their standard of living has risen • They are part of a global, not a national labor market • Services are scarce • More productivity redounds to their benefit • The job is to CUT COSTS, increase profits, push up share price… • SYMBOLIC ANALYSTS R US!!!!!!
b. The Routine Production Worker
But now no longer competitive…
Jobs in manufacturing in the US have declined
While service jobs grew……
Routine Personal Service workers: Sheltered from the direct effects of global competition……. • But not the indirect effects…..
3. Growth of a low wage work force • Low wage work force grew 142 per cent between 1975 and 1990 • No Jobs, Temp Jobs, low pay • Means growing inequality as a few symbolic analysts make more……
G. A Marxist analysis….. Symbolic Analyst - -- owners and servicers of capital Routine Production worker Proletariat Routine Personal Services Capitalists Proletariat
A Marxist perspective…. • It is the nature of capitalism to push labor costs (wages) down as far as possible • But this contradicts the necessity for capitalism to sell goods and services • Low wages constrict consumption and eventually….. • Class Warfare directed by the top 1% • Capitalist crisis!
Labor creates Property • Class value Capital’s expropriation of surplus value + exploitation, commodity fetishes, commodification and alienation Diminishing of the surplus under market competition Wage suppression, outsourcing, technological advance, search for new markets, capture of the state But continued diminishing of the surplus Inevitable decline of Capitalism or Revolution?
The political economy of community, freedom, and equality What is the BEST Political Economy? What is fair? What is Just? What do we deserve? What is the moral worth of a system of political economy?
Plato Aristotle Virtue and compassion Group Identity Define “The Good Life” Aquinas Polanyi Community Bentham Rousseau Smith Communism Individual Ricardo Class Identity communal giving Redistribution Identity defines the good life (under capitalism) Egalitarianism Wollstonecraft Jefferson Markets Equal opportunity Wealth and freedom Mill Define “The Good Life”
,
$25 million…..Is it Fair?
How should we decide? • renounce old social order. Justice is Blind. It applies to all equally. (Liberal , egalitarian view) • Equal distribution (Marxist view) • Equality of opportunity is Necessary. (equity—fairness— based on merit) • is it enough? (level playing field) • Does it still leave room for arbitrary factors that create inequality? Talent? Effort? • Redistributive Principle
Smith: Redistributive Principle unequal but better
The Market system • Economy : Market provides entitlements but not what we necessarily deserve Society
The Libertarian’s Answer • "Life is not fair. It is tempting to think that government can rectify what life has spawned." --Milton Friedman
Should we be free to own all of the fruits of our talents? – there is no freedom in a poor person’s decision to buy food and not buy a Porsche . Those who focus on the issue of equality ask: • Who wins and who loses? • The liberal answer is that we all benefit, and so no one loses. • Distributive justice theories say because the market creates inequalities, The rich stay rich and the poor stay poor • The result is not only economic, but social and ? political inequality Or Are our Talents collective assets?
The Market system is not unchangeable….. Society The social system is not an unchangeable order beyond human “The social system is not an control but a pattern of human unchangeable order beyond • M action.... The principle [of human control but a pattern of Distributive Justice] is a fair way of human action.... The principle [of meeting the arbitrariness of Distributive Justice] is a fair way of fortune" Market meeting the arbitrariness of fortune"
Community as the basis for political economy decisions Plato, Aristotle, Aquinas Polanyi Bentham Collective Community Rationality, Duty, Collective, not at the center The “Good Life” individual Rights, Virtue, greatest Not connected to disapprove private of human good for greatest wealth and freedom property number, identity economic justice
Principles of Equality Marx Politics: The State Politics: a is the communist Communism Superstrucutre revolution defines the “good Work at the center Economic classes life” of human identity ____ Exploitative class Ralling profit, economy crises of capitalism
Freedom AND equality as the central political economy principles Smith Ricardo, Wollstonecraft, Rousseau John Stuart Mill Hobbs Sympathy, Egalitaria States Thomas Jefferson Locke Benevolence : should nism: John Locke protect Rousseau practice equality Welfare distributive within the state justice Reason at market Individualism: the equality and center of freedom Competitive human ness, skill, (tension) States identity Respect talent— should Freedom: political, not stay out Libertarianis economic m, laizzez- rights of the faire protect economy economic freedom “How can a man be truly free if the fruits of his labor are not his to dispose of, But are treated as part of a common pool of public wealth” --Barry Goldwater
Nationalism From Ancient to Modern Theories of Community
Plato Aristotle Virtue and compassion Group Identity Define “The Good Life” Aquinas Polanyi Community Bentham Rousseau Maxxini Nationalism Smith Communism Individual Ricardo Class Identity communal giving Redistribution Identity defines the good life (under capitalism) Egalitarianism Wollstonecraft Jefferson Markets Equal opportunity Wealth and freedom Mill Define “The Good Life”
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